Post on 27-Mar-2020
BUSINESS ENVIRONMENT
LO 2 : Session 01: Organizational Structure
Introduction to organizing
Organizing is the deployment of organizational resources to achieve
strategic goals.
Organizing is deciding how best to group organizational activities and
resources so that the organization will achieve its goals.
Purposes of organizing
Divides work to be done into specific jobs and departments
Assigns tasks and responsibilities associated with individual jobs
Establishes relationships among individuals, groups and departments
Establishes formal lines of authority
Allocates and deploys organisational resources
Organisational structure
Organizational structure is the formal arrangement of jobs within an
organization.
The design of systems to ensure effective coordination of employees across departments
The set of formal tasks assigned to individuals and departments
Formal reporting relationships, including lines of authority, decision responsibility, number of levels and span of control
The design of systems to ensure effective coordination of employees across departments
Organization chart
The organization chart shows departments and job titles , with lines linking
senior executives to the departments of people for whose work they are
responsible.
This shows who people report to, and clarifies four features of the formal
structure:
Tasks – the major activities of the organization
Subdivisions – how they are divided
Levels – the position of each post within the hierarchy
Lines of authority – these link the boxes to show who people report to
Organizations chart
Organizational design
A process that involves decisions about six key elements
Work specialization
Departmentalization
Chain of command
Span of control
Centralization and decentralization
Formalization
Work specialization
Dividing work activities into separate job tasks.
Also known as division of labour
People become more expert in one task than they could be in several and
are more likely to come up with improved ideas or methods.
01
Departmentalization
Process of grouping jobs together to ensure coordination of tasks in known
as departmentalization.
Departmentalization identifies
what job tasks will be done by whom?
Common work activities
Common form of departmentalization:
Functional departmentalization
Geographical departmentalization
Product departmentalization
Customer departmentalization
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Refer page
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Chain of command
The lines of authority show the links between people – who they report to
and who reports to them.
In particular chain of command shows who they can ask to do work, who
they can ask for help and who will be expecting results from them.
03
The span of control
The span of control is the number of subordinates reporting directly to the
person above them in the hierarchy.
04
The span of control
Factors associated with less supervisor involvement and larger span of
control.
Work is stable and routine
Subordinates perform similar work
Highly trained and need little direction
Rules and procedures are defined
Little supervision is required
04
Tall vs. flat organizational structure
Tall versus flat organizational structure
Many layers of management
between lowest and highest
levels
Small span of control
Close supervision
Better communication
Reduce delegation
Fewer levels in hierarchy
Wider span of control
Subordinates greater decision
making authority
Few management cost
Greater employee motivation but
less control
Characteristics of tall structure Characteristics of flat structure
Centralization and decentralization
Centralization is when a relatively large number of decisions are taken by
management at the top of the organization.
Decentralization is when a relatively large number of decisions are taken
lower down the organization in the operating units.
05
Formalization
Formalization refers to how standardized an organization’s jobs are and the
extent to which employee behavior is guided by rules and procedures
These include rules, procedures, instruction manuals, job descriptions
(things which people must do)
06
Contemporary organizational design
Contemporary Organizational Design
Team Structure
Matrix- Project Structure
Boundaryless Structure
Learning Structure
Team Structure
A structure in which the entire organization is made up of work groups or
teams.
Advantages : Employees are more involved and empowered.
Reduced barriers among functional areas.
Disadvantages : No clear chain of command
Pressure on teams to perform
01
Matrix Structure
Matrix is a structure that assigns specialities from different functional areas
to work on projects who then return to their areas when the project is
completed.
Advantages : Fluid and flexible design that can respond to environmental
changes
Faster decision making
Disadvantages : Complexity of assigning people to projects
Task and personality conflicts
02
Boundaryless organization
A structure nod defined by or limited to artificial or horizontal, vertical, or
external boundaries; includes virtual and network types of organizations.
Advantages : Highly flexible and responsive
Utilizes talent wherever it’s found
Disadvantages : Lack of control
Communication difficulties
03
A small core organization that outsources major
business functions.
Highly centralized
Little or no departmentalization
Outsource the primary functions of the business
The core of the organization is a small group of
executives whose job is to oversee directly any
activities done in house and to coordinate
relationships with the other organizations
3.1
Consists of a small core of full-time employees and outside specialists
temporarily hired as needed to work on projects.
3.2
Learning organization
A structure in which employees continually acquire and share new
knowledge and apply that knowledge.
Advantages : Sharing of knowledge through organization
Sustainable source of competitive advantage
Disadvantages : Reluctance on part of employees to share knowledge for
fear of losing their power
Large number of experienced employees on the border
of retiring.
04
Flexible work arrangements
Telecommuting : is a work arrangement in which employees work at home
and are linked to the workplace by computer.
Compressed work week : A workweek where employees work longer hours
per day but fewer days per week.
Flexitime/ Flexible work hours : A scheduling system in which employees
are required to work a specific number of hours a week but are free to vary
those hours within certain limits.
Job sharing : The practice of having two or more people split a full time job.
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Thank You!